PC Jeweller Results Presentation May 30 th , 2019 Safe Harbor This - - PDF document

PC Jeweller

Results Presentation May 30th, 2019

Safe Harbor

This presentation and the accompanying slides (the “Presentation”), which have been prepared by PC Jeweller Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents

• f this Presentation. This Presentation may not be all inclusive and may not contain all of the information that

you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded. This presentation contains certain forward looking statements concerning the Company’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts,

• ur ability to manage our international operations, government policies and actions regulations, interest and
• ther fiscal costs generally prevailing in the economy. The company does not undertake to make any

announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company.

Quarterly highlights - 4QFY19 vs 4QFY18

• Overall Revenue grew by 4.2 %

! Domestic revenue grew by 8.0 % ! Exports revenue de grew by 18.6 % - voluntary reduction

• Number of stores as on 31st March 2019 at 86 (FY19 was a year of consolidation)

! Reduction of 19.8 % in Total square feet on YoY basis due to store rationalization ! Same store sales growth > 8%.

• Segmental revenue contribution

! Domestic Retail 88.7 % (85.6 % in 4Q FY 18) ! Exports 11.3 % (14.4 % in 4Q FY 18)

• Net loss of INR 376.8 crore in Q4 FY19 is due to loss in the export business on account of one time discount against

the outstanding export trade receivables aggregating to INR 513 crore. The domestic business continues to remain profitable though with slightly reduced margins

• De-leveraging balance sheet

! Reduction in financial liabilities (including bank Loans & MGL ) from INR 4,409 crore as on 31.03.18 to INR 3,211 crore as on 31.03.2019.

Financial Parameters- Qtly Comparison

500 1000 1500 2000 2500

Total Sales Domestic Retail Sales Export Sales Q4 FY 19 Q4 FY 18

2,191

• 600
• 500
• 400
• 300
• 200
• 100

100 200 300

Q4 FY 19 Q4 FY 18

Total EBITDA Domestic Retail EBITDA Export EBITDA

• 500
• 400
• 300
• 200
• 100

100 200 300

Q4 FY 19 Q4 FY 18

2,103 1,945 1,800 247 303 INR in Crore Domestic Retail PAT Total PAT Export PAT

• 440

216 192 24

• 377

118 107 12 INR in Crore INR in Crore 119

• 559

156

• 533

Operating Parameters- Qtly Comparison

2 4 6 8

Store Additions Q4 FY 19 Q4 FY 18

NIL 8

2 4 6 8

SSSG % Q4 FY 19 Q4 FY 18

5 8

200000 400000 600000

Total Area covered (Sq Ft) Q4 FY 19 Q4 FY 18

20000 40000 60000

Domestic sales/sqft (In INR) Q4 FY 19 Q4 FY 18

57,755 42,872 3,36,719 4,19,963

Financial Parameters- Annual Comparison

2000 4000 6000 8000 10000

Total Sales Domestic Retail Sales Export Sales FY 19 FY 18

8,369

• 600
• 400
• 200

200 400 600 800 1000 1200

FY 19 FY 18

• 600
• 400
• 200

200 400 600

FY 19 FY 18

9,489 6,929 6,799 1,440 2,690 INR in Crore 360 1,092 876 216

• 3

567 494 73 INR in Crore INR in Crore Total EBITDA Domestic Retail EBITDA Export EBITDA Total PAT Domestic Retail PAT Export PAT 764

• 404

491

• 494

Operating Parameters- Annual Comparison

5 10 15 20

Store Additions FY 19 FY 18

4 17

5 10 15 20

SSSG % FY 19 FY 18

20 15

200000 400000 600000

Total Area covered (Sq Ft) FY 19 FY 18

100000 200000 300000

Domestic sales/sqft (In INR) FY 19 FY 18

2,05,791 1,61,895 4,19,963 3,36,719

Showroom Details

Particulars Own Showrooms Franchisee Total FY 19 FY 18 FY 19 FY 18 FY 19 FY 18 Number of Cities 57 63 14 10 71 73 Number of showrooms 72 82 14 10 86 92 Total Area (in sqft) 3,04,731 3,93,414 31,988 26,549 3,36,719 4,19,963 Area/Showroom (in sqft) 4,232 4,798 2,285 2,655 3,915 4,565 Domestic sales/sqft (in INR)

• 2,05,791

1,61,895 FY 2019 FY 2018 Studded Jewellery Percentage to Domestic sales 38.0% 32.1% Domestic Grammage sold (in kgs) 11,560 15,537 SSSG (%) 20% 15%

Highlights: Overall Business

Particulars (INR Crore) Q4 FY 2019 Q4 FY 2018 FY 2019 FY 2018 Revenue from Operations 2,191 2,103 8,369 9,489 Domestic Retail 1,944 1,800 6,929 6,799 Exports 247 303 1,440 2,690 Gross Margins (%)

• 14.8%

15.3% 6.9% 14.2% Domestic Retail 9.7% 16.1% 14.6% 16.7% Exports

• 207.4%

10.2%

• 29.9%

7.9% Expenses (% of total Revenue) Employee Expenses 1.1% 1.1% 1.3% 0.9% Advertisements 0.4% 1.8% 0.4% 0.8% Other Costs 3.2% 2.3% 2.0% 2.0% Other Income

• 0.6%

0.5% 1.1% 1.0% EBITDA Margins

• 20.1%

10.6% 4.3% 11.5% Finance Cost 3.2% 4.0% 4.1% 3.2% Depreciation 0.2% 0.2% 0.2% 0.2% PBT Margins

• 23.5%

6.4% 0.03% 8.1% PAT Margins

• 17.2%

5.6%

• 0.03%

6.0%

Highlights: Domestic Business

Particulars (INR Crore) Q4 FY 2019 Q4 FY 2018 FY 2019 FY 2018 Revenue from Operations 1,944 1,800 6,929 6,799 Gross Margins (%) 9.7% 16.1% 14.6% 16.7% EBITDA Margins (%) 6.1% 11.1% 11.0% 12.9% PBT Margins (%) 2.8% 6.9% 7.2% 9.8% PAT Margins (%) 8.0% 6.2% 7.1% 7.3%

Highlights: Export Business

Particulars (INR Crore) Q4 FY 2019 Q4 FY 2018 FY 2019 FY 2018 Revenue from Operations 247 303 1,440 2,690 Gross Margins (%)

• 207.4%

10.2%

• 29.9%

7.9% EBITDA Margins (%)

• 226.5%

8.0%

• 28.1%

8.0% PBT Margins (%)

• 230.6%

5.0%

• 34.5%

3.9% PAT Margins (%)

• 215.9%

3.9%

• 34.3%

2.7%

INR Crore Mar 19 Mar 18 Inventory 4,988.1 5,161.3 Receivables 1,773.0 1,761.8 Debt Short term 2,090.6 1,024.9 Gold on Lease 1,120.2 3,384.5 Total 3,210.8 4,409.4 Bank Balances (i) Other bank balances 236.2 1,108.7 (ii) Cash and cash equivalents 82.7 382.7 Total 318.9 1,491.4

Deleveraging of balance sheet

Key balance sheet items

Balance Sheet

Particulars (INR Crore) FY 19 FY 18 Inventory 4,988 5,161 Inventory - Exports

• 395

Inventory - Domestic 4,988 4,766 Receivables 1,773 1,762 Domestic 51 62 Exports 1,722 1,700 Bank Balances Other Bank Balances 236 1,109 Cash and Cash equivalents 83 383 Other Current Assets 168 152 SUB TOTAL (A) 7,248 8,567 Gold Loan Payables 1,120 3384 Other trade Payables 144 177 JFL and other customer advances 163 160 Short Term Borrowings 2,091 1025 Other Current Liabilities 152 253 SUB TOTAL (B) 3,670 4999 Net Block (C) 59 77 Total (A-B+C) 3,637 3,645 Net Worth 3,936 3,926

• The export receivables of INR 1,722 crore as on 31st March 19 include receivables of INR 760 crore of exports done in Q4 FY 19

whose payment would be realised only in FY 20

• Reduction in gross debt from INR 4,409 crore FY 18 to INR 3,211 crore in FY 19
• Debt-Equity ratio
• FY 2018 – 1.12
• FY 2019 – 0.82

Domestic Retail - Business strategy

• The FY 2018-19 has been a year of consolidation and rationalization for the Company
• Store rationalization:
• Relocated 5 stores, reduced store size of 4 stores and renegotiated rent for 4 stores during the year.
• It has also merged four stores and closed six to optimize store performance,
• The Company has however shown ~ 2% growth in its yearly domestic turnover which has resulted in sales/sq

feet increasing from INR 1.62 lac as on 31.03. 2018 to INR 2.06 lac as on 31.03.2019.

• Optimising showroom inventory, identifying fast moving items with emphasis on diamond jewellery
• Working on contemporary brand positioning and developing a new brand logo
• The company has started rolling out its new look on a pilot basis from its Karol Bagh Store
• Focus on light weight jewellery at attractive price points (starting from INR 6,000) to drive footfalls

Exports - Business strategy

• Export business is a credit driven business where credit terms >6 months backed by long export credit

lines by banks

• Company has voluntary reduced this business by nearly 47% during FY19
• The De Merger Scheme is subject to various lender/ creditor and statutory approvals and is expected

to be completed only by end of FY20 The demerger will help both the business achieve accelerated growth given the deep market potential. The enhanced management focus on the domestic business will allow it to pursue strategies to ensure above industry growth rates thereby allowing all stakeholders to benefit

Business Outlook going forward

• Company has significantly reduced its leverage and is now poised to open around 10 stores in FY20
• Open 1 owned store in 1QFY20
• Going forward, new stores opening will be a mix of COCO & Franchisee
• CY 2019 has more auspicious wedding days (vs CY 2018) - bridal sector accounts for more than half of Indian gold

jewellery consumption

• Benefits of store & Inventory rationalisation to accrue from H2FY20

"

E-Commerce

"

www.pcjeweller.com is a great complement to our physical showrooms and this aligns with our strategy of targeting future wedding jewellery customers at an early age

"

Target the growing Work Wear/ Daily Wear jewellery segment with regular new collections

"

Helps us catch the target segment young - A regular visitor/ buyer at www.pcjeweller.com is more likely to visit/ prefer nearby PCJ Showrooms when she/ he has to evaluate a high-ticket wedding jewellery purchase

"

Better Analytics - Enhanced data collections and analysis of customers’ preferences and behaviour to develop effective marketing, communication and targeting strategies for both online and offline stores

"

Omni Channel Roll Out

"

Online - Offline Integration is the way forward for any retailer, especially in jewellery sector. The ability to provide customers with variety of ready to ship products online will drive the conversions online.

"

We piloted our omni channel with over 2500 designs from Delhi - NCR showrooms in Q3 and have seen very good response.

"

Currently we have over 4000 designs (15,000+ products) from 60 showrooms across 15 states live online under same day shipping.

"

Specially curated designs are currently digitised and we continue to evaluate and add to the selection

"

Additionally, this also helps in discovery of high value products online and conversion offline, as customers can checkout the products available at nearby locations.

"

Average Selling Price of products under Omni is 30% higher than for online and marketplace make to order products.

"

Started pilot for Omni integration with TataCliq

"

Our products are currently listed on leading marketplaces – Amazon, Flipkart and TataCliq, which enhances our ability to showcase products to a larger customer segment. We are also one of the few jewellers on SBI Yono App. 16

Digital Transformation

Company overview

The world of PC Jeweller

Established in 2005 today the 2nd Largest listed jewellery retailer in India Featured in the list of 20 fastest growing Luxury Goods companies across the world #40 in the Top 100 Luxury Goods Companies Globally – Deloitte report Source: Deloitte – Global Power of Luxury Goods 2019 A Leading player in Indian Wedding Jewellery Market

Our DNA built for performance…

Grown from 1 showroom in Karol Bagh (in 2005) to 87 showrooms today " Focussed on Tier I & Tier II locations to leverage the income growth and brand awareness in such locations " Consistently innovating in terms of designs, product ranges and leveraging technology " Focussed on Tier I & Tier II locations to leverage the income growth and brand awareness in such locations " Consistently innovating in terms of designs, product ranges and leveraging technology Committed to our principles " Hedging Gold and Currency since initial years " Continuously enhancing design team and manufacturing facilities to ensure we are ahead of competition in terms of designs and cost efficiency " Focus on diamond jewellery and wedding jewellery And combining Key Elements " Ability to have a long term vision and plan ahead " Ability scale up existing operations " Customer – centric mindset

…Growth since inception

Started operations with one showroom in FY 06. 24 Showrooms Bridal Jewellery

FY12 FY18

Sales (INR Crore) 3,042 9,489 8,369 16% EBIDTA (INR Crore) 349 1,092 360 18% PAT (INR Crore) 230 567

• 3

14%

“#2 largest listed jeweller in India as on date’’

CAGR

92 Showrooms Bridal, Fashion and Lifestyle Jewellery 10 Franchisee Stores Online Platform AZVA 86 Showrooms Bridal, Fashion and Lifestyle Jewellery 14 Franchisee Stores Online Platform Online-Offline Integration AZVA

FY19

Mirosa

Dominant presence in North and Central India

" 86 showrooms as of March 19 " Presence in 72 cities & 18 states

Map not to scale

To be replaced

Ahmedabad Bhopal Jabalpur Gwalior Udaipur Bhilwara Beawar Pali Jodhpur Ajmer Jaipur Gurugram Faridabad Ghaziabad (3) Noida (2) Hyderabad New Delhi (13) Haridwar Dehradun Yamuna Nagar Chandigarh Rohtak Hissar Sri Ganganagar Ludhiana Amritsar Mathura Agra Bareily Kanpur Lucknow Gorakhpur Allahabad Jammu Varanasi Sonipat Siliguri Bhubaneshwar Bilaspur Raipur Bhilai Ranchi Dhanbad Durgapur Guwahati Patna Bhagalpur Gaya Bhiwani Solan Moradabad Haldwani Nagpur Jhansi Alwar Aurangabad Bahadurgarh Hapur Hardoi Jamshedpur Kaithal Muzaffarnagar Palwal Panchkula Sirsa Aligarh Meerut Rudrapur Pune Deoria Rewa Saharanpur

Sub - Brand

Fresh designs added quaterly Merchandise consisting of fancy silhouete, delicate design, casual look and affordable wear Gifting Range The Mirosa woman is younger, With aspirations and desires, she wants to be a part

• f this beautiful universe. She wants to stand out, she wants to leave her mark. A

collection which has a variety of range for working women. Starting from INR 5,999 upto INR 1,25,000.

Sub - Brand

Weddings are celebrated in the most colourful and vivid way. Every occasion is important. So is the jewellery adorned to complete your ensemble. Inayat is the wedding wear for every occasion.

Sub - Brand

Coined from the Sanskrit word ‘ashva’, the name Azva symbolizes the seven vows every couple takes/says

• n their wedding day. Azva celebrates the wedding vows with 22-karat Indian gold jewellery designs that

are resplendent. The Azva gold jewellery is created to highlight the best of handcrafted skill. Shimmering inspirations of gold masterpieces, it is the jewellery story that evolves flawlessly well from an evening of cocktails to your best friend’s

• wedding. With an eye on creating the latest gold designs in jewellery, that pairs just as well with a saree is with

that gown selected for the reception.

Sub - Brand

An innate ode to the colourful mosaic of Royal Rajasthan. A collection which uniquely personifies the Grandeur of the state embedded with the spirits of crafts which have been meticulously passed on from the generations. Gota patti aspires to Weaves the dreams of a flutering Bride; An innate craft which has been adorned by the

• royalties. The applique technique where gota, a strip of gold cloth of different widths is woven on red or

magenta pink which symbolizes the holy colour of vermillion

Sub - Brand

PERIWINKLE Blossoming Friendship PRIMROSE Long Lasting Relationship

LoveGold has ignited the world’s desire for Gold jewellery with the new generation. It has achieved to combine powerful elements like style, designers and jewellery to create aspirational content for the

• youth. Jewellery starting from INR 9,000/-

Collections

A place where our company PC Jewellers has it’s innate roots. Drawing inspiration from the Lal Quila’s intricacy

• f the architecture. The collection incorporates never used before technique of “Mokumegane” made in 22k

Gold which makes the collection exclusive and unique.

To north collection pays homage to the cultural flamboyance of the metropolitan. Perfectly complimenting the tropical richness of the region, the prosperous heritage collection imparts a fresh twist to the elegant and pious gold

• rnaments.

A celebration of the power of Shakti, the east collection which comprises of the styles of jewels prevalent in the harmonious region, is a sonnet dedicated to the culturally rich land of artists. Paying tribute to the land of colours, the west collection is an accolade to the bold and varied ornaments of adoration worn in the valorous region.

Collections

A collection to express your feelings through beautifully curated designs in Brown Diamonds, that draws inspiration from coffee beans to awaken the spirit and brighten up the day. Jewellery starting from INR 15,000

Collections

A collection based on alphabet pendants combined with heart to express the love to the loved once. This collection has customised beautiful pendants starting from INR 10,000

Collections

Individualistic jewellery collection which reflects you and your personality. It caters to different personalities like the Music Lover, the Traveller, the Nature Lover etc. and reflects their persona through little things like words and

• symbols. It is something that you would like to wear everyday talking about your passion and what you like in general

in life. Comprising of rings, pendants, bracelets and charms, each jewellery piece truly adds meaning to your life. For Women of age 23-35 years. Mostly millennial who are experimental and value the thought invested in the product rather than the material itself.

Celebrating Cricket

# First time in India launching a collection medal for ICC Cricket World Cup 2019 # PC Jeweller has been appointed as the Distributor of Official ICC World Cup 2019 Commemorative Medals in India # Launched 2 timeless designs honoring the Indian Cricket Team and The Striker # Available in Pure Silver (15.5g, 31.1g) and Pure Gold (5g, 10g). # Memories for a lifetime of this exceptional sporting event.

Thank you